The Law of returns is also called

(A) Law of fixed proportions

(B) Law of variable proportions
(C) Law of constant returns
(D) Law of increasing returns.
Ans:B

Which of the following refers to the expenditure incurred to produce a

particular product or service?
(A) Profit
(B) Price
(C) Capital
(D) Cost
Ans:D

Short run cost curves are called

(A) Operating curves
(B) Fixed curves
(C) Variable curves
(D) Planning curves
Ans:C

Which of the following are fixed in the short run?

(A) Variable costs
(B) Semi variable costs
(C) Fixed costs
(D) Semi fixed costs
Ans:C

The costs of the next best alternative foregone is known as

(A) Implicit cost
(B) Sunk cost
(C) Opportunity cost
(D) Controllable cost
Ans:C

Marginal cost concept in economic theory is not useful to matters

relating to
(A) Allocation of resources
(B) Product pricing decisions
(C) Make or buy decisions
(D) Product promotion strategies.
Ans:c

A monopolist can either control the price or ……..but not both.

(A) Cost
(B) Output
(C) Input
(D) Profit
Ans:B

Under perfect competition, the price is equal to

(A) AR=MR
(B) AR>MR
(C) MR>AR
(D) MR not equal to AR
Ans:A

In a perfect competition, the demand curve for an individual firm is

horizontal and
(A) Perfectly inelastic
(B) Perfectly elastic
(C) Unit elasticity
(D) None of the above
Ans:A

In the short period equilibrium, the price at which the available stock
can be sold is called
(A) Standard price
(B) Retail price
(C) Market price
(D) Normal price
Ans:C

Price in the long run is called

(A) Standard price
(B) Retail price
(C) Market price
(D) Normal price
Ans:D

The cause for monopoly is not due to

(A) Government policies and legal provisions
(B) Control over outputs
(C) Mergers and acquisitions
(D) Research & development
Ans:c

Price discrimination is also called as

(A) Standard pricing
(B) Preferential pricing
(C) Differential pricing
(D) None of the above
Ans:D

Which of the following is not a feature of monopoly?

(A) Single firm
(B) Includes neither close substitutes nor competitors
(C) Products with elastic demand
(D) Certain statutory privileges
Ans:C

Which of the following refers to the change in revenue by producing and

selling one more unit?
(A) Total revenue
(B) Average revenue
(C) Marginal revenue
(D) Marginal cost
Ans:C